Providing high quallity corks, however, is no easy
task. A natural product typically harvested every nine
years from the Quercus silber oak trees of central
Portugal, cork bark is subject to a host of complications.
For suppliers in Portugal, the world's largest cork
growing and processing region, the quality objective
has led to a critique of existing programs and introduction
of technological innovations.

Responding to the growing demand for quality cork,
especially in the U.S. and Australia, suppliers have
taken a greater role to ensure that all possible steps are
taken to eradicate common quality problems such as
taint, worm holes, and green wood.

Cork growers

In the forest, it is no longer enough simply to harvest
on a nine-year Cycle. Portuguese cork growers are
improving the forest environment to facilitate growth
of quality cork bark. Removing grass around the base
of the trees destroys natural habitats for destructive
insects that burrow into the tree bark
and form holes that can lead to leaking
wine corks. Trees are pruned and
thinned to promote healthy, upright
growth that provides clean and
straight bark.

Growers are also improving harvest
practices. Some growers delay harvest
for an additional one or two years,
which allows for the development of
thicker bark that yields a higher percentage
of wood suitable for wine cork
production. Increased wood percentage
means a reduction in the level of
critical defects.

Corks are punched from bark.

Sources of taint (2,4,6-Trichloroanisole
or TCA or other taints) have
been connected to the forests, prompting
growers to rethink the age-old tradition
of drying cork on the forest floor
and to experiment with improved drying
methods, such as storing cork bark
planks on plastic pallets to avoid
ground contact.

Preparadores
Once harvested, nearly all cork is sold
to preparadores, who sort
the slabs of cork bark
according to quality,
reserving the top 15% to
20% for the wine cork
industry and selling the
remainder for a broad
spectrum of industrial
uses. In addition to sorting
the cork, preparadores boil
all raw cork bark to kill
harmful molds and reduce
tannin levels. The molds,
however, can and do grow
back, so processors must
keep the wood dry throughout processing.
This raw material is then sold to
individual cork factories or to cooperatives
that resell the cork to smaller
"home" producers who punch cork for
resale.

Preparadores have been identi fied as
a possible source for contamination
and taint. Pressure is being exerted on
these middlemen to ensure that their
operations are run cleanly - that
boiling water is changed regularly
and cork is dried and stored properly.
Partly as a result of improvements by
preparadores, taint rates have dropped
from the 6% to 8% levels of a decade
ago to present levels of approximately
1%.

Factories - the final process
Though the efforts of growers and
Preparadores are critical, most responsibility
for quality lies with the cork
manufacturer. Whether a large facility
employing dozens of workers and
producing millions of corks or a small
independent, family-owned operation,
the Portuguese cork factory
holds responsibility for reboiling,
punching, and washing the cork, and
most important, for conducting countless
cork quality sorts, checks, and
examinations.

Because factories re-boil and store
the cork, issues of taint arise once more.
Here again an emphasis on clean water
and storage conditions is being stressed
to overcome taint problems that have
plagued the industry in the past.

One focal point for quality issues
related to taint is washing and bleaching
of the corks. Traditionally, all corks
were washed in baths of chlorine and
oxalic acid. Studies by CTCOR (the
Portuguese cork industry's research
arm), however, have shown that the
traditional method of controlling the
chlorine concentration in these baths
may have facilitated development of
TCA. Most factories have installed
computerized equipment to consistently
maintain the ideal chlorine level
and/or have introduced hydrogen peroxide
washes. The hydrogen peroxide
wash provides a deeper, more thorough
cleaning than the lighter, more
cosmetic wash provided by traditional
chlorine washes.

Corks are washed in computer-monitored baths.

Despite these precautions, elimination
of TCA remains an overriding concern
for the cork industry. The widespread
presence of this compound in
air and water make it impossible to
completely eradicate. Since chlorine is
known to be a potential contributor to
TCA, peroxide washes, while not a
cure-all, are widely seen as a better
alternative to traditional chlorine
washes.

While cork is still primarily punched
by hand, machinery is being introduced
and playing an increasing role in
routine dimension and quality checks.
Ultimately, however, the factory's
largest payroll is attached to the sorting
tables where many women are
employed. Their visual checks (often
complemented or replaced by
machines) sort out defects such as
cracks, worm holes, green wood, bilrk
fragments, and size problems. In most
CilSCS, these women Me the lilst check
on cork 'luillity before the product is
sold ilnd shipped out of Portugal.

Industry structure influences quality

Appreciating the efforts to ensure
cork quality requires some understanding
of the cork industry. While the
number of growers and preparadores is
relatively small, the number of factories
is immense. Concentrated in the corkproducing
region surrounding the city
of Oporto are more than 600 factories
- ranging greatly in size. Most of these
are small "mom-and-pop" businesses
operating out of garages, punching
cork; which is then resold to larger
manufacturers. The majority of
exported cork, however, is produced by
about 20 larger factories.

Since most of these factories are
located in a collection of towns close to
each other, the industry tends to be
close-knit. It is not uncommon for
brothers and cousins to compete
against each other for the same business,
and competition is fierce. The very
number of factories and the expense of
holding inventory fuel an aggressive
fight to sell the punched corks as
quickly as possible, but at a price high
enough to pay the preparadores' costs
and still make a profit.

Finished cork from the factories is
primarily marketed in three ways.
First, most large factories sell their
product directly through importers.
This gives the factory control over quality
and supply, but may also mean that
their sales are driven by production.
They generally have exclusive agreements
with one importer in each country,
or they distribute their own cork,
taking on the responsibility to sell what
the factory makes rather than offering
what the market wants.

Corks before preliminary inspection.

Second, a network of agents is also
active in the region. They buy directly
from different factories on behalf of
their clients, who are the importers in
the U.S., Australia, Europe, and other
markets. This system allows the agent's
clients to tailor all purchases exclusively
to their needs. However, in many
cases, agents simultaneously represent
both the interests of their client and the
factory. In these instances, the agent is
not only working to procure cork that
meets his client's needs, but he may
also be retained by a factory to sell its
production. This can lead to a division
of loyalties and conflicts of interest.

Finally, an importer may purchase
cork from a number of factories and
then sell that cork to a wide range of
wineries. Since there are no alliances
with a particular factory and no profit
motivation to buy from any given manufacturer,
in this system the supplier
can avoid conflicts of interest and focus
on quality and value. However, the
independent nature of this system can
make the task of procuring cork a
greater challenge for the importer.

The industry is further complicated
by thousands of miles that separate
the U.S, wine market from Portugal.
Given that distance, buyers can
unknowingly purchase Portuguese
cork that does not meet the quality
demands of U.S. wine producers.
Dealing with these complications, as
well as a different language and a foreign
business culture, is a challenge.

Shaking up the structure to ensure quality

One American cork supplier has
overcome the complexities of this
industry structure to ensure reliable,
impartial quality examinations of all
cork before it leaves Portugal.

Cork Supply USA (CSU), a Bencia,
California-based provider of wine cork
stoppers, has supplied cork to the U.S.
wine industry since 1981. Raised in
Portugal and apprenticed in the cork
industry, owner Jochen Michalski experienced
first-hand many of the complications
and difficulties cork suppliers face
in their efforts to meet American winemakers'
demanding quality standards.

For years, Michalski relied on his
personal association with cork factory
owners to ensure a consistent, reliable
source of quality cork. Despite his personal
relationships and stringent quality
control methods, he received an
occasional poor cork shipment.
Returning low quality shipments to
Portugal was an expensive venture that
not only jeopardized important supplier
relationships, but also left CSU in
a short supply situation. Accepting the
corks, however, meant absorbing the
cost of selling poor quality cork purchased
at a premium price.

Sensory testing lab at Global Cork in Portugal (Cork Supply Group).

Faced with this conflict, CSU in 1991
created a quality assurance laboratory
in Portugal: Global Cork. While several
cork factories have quality control labs
to examine their own production,
Global Cork was established to operate
entirely independent of production
quotas and cost issues.

Given complete autonomy, Global
Cork's exclusive charter is to ensure
that every cork lot purchased by Cork
Supply passes the company's quality
standards. To ensure that level of independence,
Global Cork holds absolute
authority to refuse a lot if it fails any of
the company's quality tests.

Global Cork provides a quality funnel
through which cork shipments
must pass before being exported. This
places yet another layer of tests and
examinations on Portuguese corks and
offers the cork industry a model for
insuring quality shipments.

"When Global Cork started, I Wanted
to be able to offer CSU more than the
same visual tests that are common in
the industry," explains Allegro. "Now,
every lot that we sample is not only
visually inspected, but also undergoes
a sensory examination to detect cork
taint or 'off' aromas." Today, the lab
examines shipments representing more
than 250 million corks annually.

Pass or Fail

Uninvolved in purchasing decisions,
Globill Cork steps into action once CSU
concludes negotiations to purchase
cork from a supplier. When an order is
placed, the factory is informed that all
purchases are contingent upon the
approval of Global Cork. To protect its
impartiality, Global Cork receives a
copy of the order with the pricing information
removed . Upon preparing the
order, the factory contacts Allegro's
staff, who, within 24 hours, will collect
a sample based on the U.S. military
standardized sampling system.

At the factory, a Global Cork
employee randomly pulls a representative
sample from the prepared order,
systematically selecting corks from the
top, middle, and bottom of each sampled
bale. That sample (twice the
Military Standard) undergoes a series
of sensory and visual tests. For example,
the sensory test for a 51O,OOO-cork
lot would require 39 individual corks
from the 13 separate bales. One hundred
corks from this sample are individually
placed in "1OOml flasks with
wine and allowed to soak for 24 hours.
The wine is then examined for any taint
or mold odors. If the sample lot does
not pass this test, the entire lot being
offered for sale is refused. No additional
tests will be conducted.

"All testing stops if the cork sample
does not pass our taint test," declares
Allegro. "No amount of resorting can
eliminate taint, and we will not take any
chances. What the factory does with that
cork is their business, but it won't end up
with a Cork Supply customer."

While the sensory test is being conducted,
a portion (100 corks from a lot of
less than 200,000, 150 corks from a lot of
201,000 to 500,000, 200 corks from a lot of
501,000 to 700,000, and 350 corks from a
lot greater than 700,000) of the sample
undergoes a battery of visual quality
tests. Every defect is scored, and the lot is
compared against a control sample lot
for the quality of cork being purchased.
To speed up the tedious task, electronic
measuring devices tied directly to computer
evaluation forms are used to
ensure an exact measure of dimensions,
weight, density, ovality, and moisture
levels. Ultimately, however, it is the
trained human eye that determines if the
sample meets Global Cork's quality
expectations.

Most cork fails

"Based on our records, most of the
cork we evaluate fails. This is usually
due to physical defects including nonconforming
moisture levels and quality
not meeting our standards," Allegro
reports. "The factory then must resort
the product and submit it for a second
or even third evaluation where all the
same quality tests will again be conducted."

When a lot receives Global Cork's
approval, the original sample is
divided in half; one portion is held at
Global Cork and the other is packaged
and shipped along with the approved
cork to CSU's quality control lab in
Benicia. When the lot arrives in
California, the sample is opened and
used as a check against the actual shipment
to ensure that the cork that passed
Global's inspection is the same cork
that has arrived in the U.S.

Global Cork's charter to ensure quality
is even more difficult in short supply
years, such as 1996. Limited supplies
tighten the market, giving more power
to factories, which enjoy a wealth of
anxious alternative outlets. "In short
years, you really have to rely on the
relationships that you've built," says
Michalski. "This is a long-term business
and factories know and appreciate the
importers that have an established track
record. If you have those relationships,
quality can still be had, but maintaining
our standards means paying higher
prices to manufacturers."

Fortunately, the short 1995 Portuguese
crop that drove up prices and left
suppliers desperately searching for
cork that met quality standards has
ended. The 1996 Portuguese harvest
produced approximately 50% more
excellent quality cork wood than the
small 1995 crop. Price spikes continue
to reflect inventory shortages, but
Michalski expects those prices to eventually
stabilize as the pipeline is filled
with a sufficient supply of high quality
cork wood.

Global Cork assists manufacturers by
providing technical know-how to facilitate
improvements which will benefit
the manufacturer and ultimately the
buyer. Through its involvement and
recommendations, Global Cork has
helped several factories improve their
processing procedures, tighten controls,
and make improvements that
lead to a more hygienic processing
facility and better quality cork.

Corks undergoing physical testing to ensure quality before export.

Quality in transit

"I get criticized for going overboard,
but cork can suffer as much in shipment
as it can in the washing or manufacturing
process," Allegro explains as
she inspects a shipping container.
Inside the blackness of the 40-foot container,
she and her staff search for
holes, leaks, or off odors that could
cause problems for the cork during the
five-week trip to the U.S. Just like the
cork, every shipping container, must
pass Global Cork's inspection.

Integrity

Cork Supply USA isn't the only company
that appreciates the merits of this
type of thorough, independent evaluation.
Nearly 30% of all the cork tested
by Global is now being contracted by
other cork buyers around the world.

The real challenge to Global Cork's
independence, however, is when it
evaluates cork from Cork Supply USA's
sister company, Cork Supply Portugal
Despite being a member of the Cork
Supply Group (which owns Cork
Supply USA, Global Cork, and Cork
Supply Australia), the Portuguese production
arm of the company gets no
breaks. About 25% of Cork Supply
Portugal's output is purchased by Cork
Supply USA, but every shipment
undergoes the same exhaustive Global
Cork tests as any other shipment
purchased by Cork Supply USA.

"Quality is blind," states Allegro. "I
know they don't always appreciate it,
but ultimately I help Cork Supply
Portugal by holding strictly to our
quality standards. Ultimately it is the
wineries that establish the standards
we have to meet. Either the corks pass
or they don't. Cork Supply Portugal
has learned not to expect any
favoritism from us."

The relationship between the two
companies is softened, however, by a
special service Global Cork provides
exclusively to Cork Supply Portugal
"We examine and test all the raw cork
they buy. If we can catch TCA problems
there, they have a real advantage over
the competition."

In an industry where cork quality cannot
be compromised, Global Cork offers
an added level of protection to cork
suppliers and wineries alike. Since Global
Cork was founded, no lots received by
CSU have had to be returned to
Portugal. In the pre-approval process,
wineries have declined lots, but this is
generally because grades did not meet
their specific needs.

"Now cork factories know what we
are demanding," says Michalski. They
know they can't slip anything past us.
and they know that no cork is going to
leave Portugal until it has Global's stamp
of approval. Global Cork has made a
tremendous difference, and I expect
more cork companies will follow suit by
contracting with Global or starting their
own independent labs."

All cork purchased by Cork Supply USA must first
undergo and pass the following tests conducted by
Global Cork in Portugal.

Sensory test: Samples are pulled from the lot using a
detailed sampling plan. Individual corks are soaked in
100ml flasks of neutral white wine for 24 hours. After 24
hours, the wine is transferred into glasses and sniffed to
determine acceptability of final sensory properties. The
test is designed to reject lots with excessive levels of TCA
or taint, and if a lot fails this sensory evaluation, the lot
is permanently rejected.

Visual quality: The remaining corks are evaluated for
wood quality and categorized as Extra, Superior, 1, 2, 3,
or 4. In addition to the cork by cork evaluation, a random
sample from the lot is compared to established reference
samples to determine acceptability. Corks not meeting
the standards for specific qualities are rejected and must
be reselected by the processors. After reselection, samples
are again pulled by Global Cork. There is no limit to
the number of times a lot may be rejected.

Residual oxidants: To detect the presence of oxidants
on the cork's surface, Global Cork agitates corks in a
solution of potassium iodide and acetic acid. If residual
oxidants are present, the solution will turn a distinct violet
color. The test is a pass/fail for residual oxidants and
lots with any traces are permanently rejected.

Physical characteristics: Length, diameter, and weight
are evaluated for conformity to specifications. Diameter
is measured at two points which are perpendicular to
each other. The final diameter value is an average of
those two readings. By performing diameter analysis in
this fashion, ovality (roundness of the cork) information
is available. There is a +/- 1mm tolerance for length.
From the sampling of each lot, if more than 5% of corks
are not within the acceptance range for diameter and/or
if more than 10% are not within acceptance range for
length, the lot is rejected.

Additionally, length, diameter, and weight values are
used to determine cork density. The cork weight is
divided by the volume after volume is determined using
the calculation: πr2 x length.

When corks arrive in the US, each of these tests (with
the exception of physical characteristics) is again performed
by quality control lab technicians at Cork Supply
USA. Additionally, after cork has been treated with a coating
of paraffin and silicone, Cork Supply USA conducts
several treatment evaluations including dust, capillary,
carousel, extraction force, microbiological, and sensory
tests.